Algeta Opts for 50-50 Split in Bayer Deal for Alpharadin

By Nuala MoranStaff Writer

LONDON – Algeta ASA decided to go for the higher-risk, but hopefully more profitable route in U.S. commercialization of Alpharadin, exercising an option last week on a 50-50 co-promotion agreement for which it is liable for half the costs.

Under a September 2009 global licensing deal with partner Bayer AG, Algeta had the right either to receive a royalty on sales or to take ascending co-promotion rights – from 25 percent up to a maximum of half the market – for Alpharadin, radium-223 chloride for treating bone metastases.

"We've taken the full 50 percent because this is an area of such high medical need," CEO Andrew Kay told BioWorld International. "This is a major step forward for Algeta – we are making a blockbuster investment in what everyone says will be a blockbuster drug."

Algeta has, of course, done projections on how much more it will earn from this investment than if it had left U.S. sales and marketing to Bayer and waited for the double-digit royalty checks to roll in, but Kay declined to give any figures.

"We've delivered everything we promised to the shareholders over the past three years, and we will continue to do so with this decision to exercise the co-promotion option in full," he said.

Kay also preferred not to comment on how much Algeta will need to invest in the U.S. operation to match the outlay by its big pharma partner. In expectation of taking up full 50 percent of the rights, Algeta added to the $55 million cash it had in the bank by raising $45.4 million in a private placement in February. (See BioWorld International, Feb. 15, 2012.)

The Oslo, Norway-based company also is due to receive a €50 million (US$65.7 million) milestone from Leverkusen, Germany-based Bayer on first regulatory filing of Alpharadin in the treatment of bone metastases in castration-resistant prostate cancer.

Bayer is preparing to file in both the U.S. and Europe, and expects to do so by mid-2012. "Overall, I believe that is sufficient cash to pay our half of a blockbuster launch," Kay said.

Bayer and Algeta are in the thick of scoping the U.S. market and deciding "on the right size, shape and geographical distribution" for the field sales force, Kay noted.

In January, Algeta said a high-profile recruit, Jeff Albers, formerly vice president of Genzyme Inc.'s U.S. hematology and oncology business, was named president of its U.S. operations, based in Cambridge, Mass. Subsequently, Algeta said Philina Lee, global product manager for Jevtana (cabazitaxel) at Sanofi SA, was joining as director of U.S. marketing.

"We will now be dividing all costs and all responsibilities 50-50 with Bayer all down the line," Kay said. Preparations for launch also are proceeding in Europe, but there they are the sole responsibility of Bayer.

"Unusually for a European biotech, we declined to have involvement in Europe. We wanted to be in the U.S., which is a single market and the most profitable in the world. This is a major step forward for Algeta and good news for biotech in Europe," Kay said.

The Phase III trial of Alpharadin was stopped by the data safety monitoring board in June 2011, 12 months ahead of the expected end of the study, when the interim analysis showed the primary endpoint had been met.

That left Algeta running to catch up on the building of a manufacturing plant for Alpharadin in Oslo. Kay said the work has been expedited without additional cost, but with cash being spent sooner than expected.

The facility is now being qualified, and regulatory batches are on target to be produced by the middle of the year.

Alpharadin is radioactive, but Kay said it can be distributed via existing logistics chains for PET (positron-emitting tomography) consumables.

"Alpharadin is produced in ready-to-use vials and has a four-week shelf life; it can be shipped down PET channels, and we've never missed a patient dose to date." Kay said. The capacity of the new plant is sufficient to support the worldwide launch of Alpharadin, he added.

In February Algeta released the complete survival analysis from the Alpharadin Phase III trial based on data from all 921 prostate cancer patients.

The updated analysis confirmed the overall efficacy results of the pre-planned interim analysis from June 2011, showing an increase in median overall survival of 3.6 months (14.9 months in the Alpharadin arm against 11.3 months in the placebo arm).